Africa's funding fears over slower China

Thursday, September 10, 2015 - 01:35

As China's slowdown hurts African commodity exporters, others on the continent are fretting that an era of Chinese-funded airports, roads and railways may be at risk. As Sonia Legg reports, there's barely an infrastructure project in Africa in which China is not involved.

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Nairobi's transport system owes much to China. These roads were built with the help of their money and expertise. In fact the lion's share of infrastructure projects in the whole of Africa - not just Kenya - involve China. They've ploughed money into the country's airports, roads and railways to make it easier for them to take out Africa's many commodities. Economic analyst Aza Ajamin says as demand for commodities falls so does the price. (SOUNDBITE) (English) ECONOMIC ANALYST AZA AJAMIN SAYING: "This has resulted in the currencies of countries that are heavily depending upon exports in commodities to suffer." China is Africa's biggest trading partner. Even a small reduction in Chinese imports - they were down 14% in August - can have a big impact, says Eric Musau from Standard Investment Bank (SOUNDBITE) (English) SENIOR ECONOMIC RESEARCH ANALYST AT STANDARD INVESTMENT BANK, ERIC MUSAU SAYING: "Other economies relying a lot on commodities if you look at Angola, Nigeria and to a certain extent Ghana, we're seeing these African economies struggling with their economic dependence." Growth in Africa's two biggest economies has been disappointing in recent months. An expected 4 percent rise in Nigeria is now considered too high. And South Africa's prospects may also need revising down. It's home to 80 percent of the world's platinum reserves. But industrial disputes have led to job loses and mines closures. Many say it's time to rebalance the continent's economies by focusing trade within Africa and seeking new funding partners. The trouble is many aren't as forgiving as China - about human rights issues, corruption and a lack of democracy.

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